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$200M Aaron Rodgers Took Home Only $49,600,000 Last Year Due to Michael Jordan Tax Deductions

Published 08/11/2023, 5:31 AM EDT

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Rodgers’ last season might not have seen consistent success in terms of both playoffs and income. While on one hand, A-Rod and the Packers found themselves in a remarkable position, fighting for the last playoff spot in the NFC, after losing seven of their previous eight games. On the other hand, despite his 18-season tenure with the Packers, the 39-year-old quarterback had to contend with income tax implications.

While Aaron Rodgers has now established his residence in the Big Apple and is playing for the Jets as their new quarterback, the newly minted Jets QB experienced the change of scenery he had been seeking. He agreed to a revised contract amounting to $112.5 million over three years. However, probably the alteration in his income over the past year wasn’t quite as welcome.

Aaron Rodgers’ income challenges across state lines

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As per insights from Andrew Petcash, an expert in athletic finances, shared on Twitter, it’s evident that in 2022, Rodgers encountered the jock tax. During his final season with the Packers, Rodgers garnered approximately $50 million through his contract. Nonetheless, out of this sum, Rodgers had to relinquish over $400K due to the “jock tax,” a well-known income tax applied to athletes, leaving him with $49,600,000.

This particular tax is imposed by various states on non-residents who earn within their boundaries. Petcash’s tweet illustrates the concept: “For example, when Aaron Rodgers plays in California he pays their rates and not Wisconsin’s.” It particularly impacts high-earners like NFL MVP Aaron Rodgers. His recent $9.5 million mansion purchase in New Jersey could lead to jock tax changes for him next season.

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However, it’s important to note that the jock tax isn’t a novel concept; many players have been subject to it for decades. Its prominence surged in 1991, largely due to the involvement of NBA legend Michael Jordan.

How the NBA legend sparked a tax revolution?

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The inception of the jock tax traces back to a pivotal basketball showdown between Michael Jordan’s Chicago Bulls and the LA Lakers in California. Following the Bulls’ victory, the team indulged in a few extra days of celebration. However, the revelry was short-lived for MJ’s accountant, who received news that California demanded taxes from the superstar.

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In a twist of fate, the State of Illinois swiftly responded with a similar policy, targeting Californian players who competed in Chicago. This initial spark soon ignited a nationwide trend, with each state crafting its version of the “Jock Tax.” Yet, its reach isn’t confined to athletes alone. Trainers, doctors, coaches, and a spectrum of professionals earning across multiple states are also subject to its grasp.

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The scope is expansive, encompassing all members of a team. The financial windfall generated by the jock tax is staggering. Illustratively, California stands out, raking in a remarkable $250 million annually from these taxes alone.

Watch this story: Super Bowl winner Aaron Rodgers makes an unprecedented move with his $35 million sacrifice

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Written by:

Bhwya Sriya

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Bhwya Sriya is an NFL Writer at EssentiallySports. With a Master's degree in Journalism and Mass Communication from an esteemed university, Bhwya tries to amalgamate her love for sports with her creativity. Her interest in sports arose when Bhwya represented her district on a race track in school.
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Edited by:

Mallika Singh